The Charter Co. lives on 30 years after disaster

JACKSONVILLE — In his early 30s, Howard Serkin found himself on a Delta flight from Jacksonville to New York with a $13 million check in his vest pocket that Charter Insurance would use to purchase the life insurance business of Crum & Forster.

Serkin, now chairman of the investment banking firm Heritage Capital Group Inc., is one of many prominent Jacksonville business leaders who started their careers at what was once one of the largest and most powerful companies based in Jacksonville.

The Charter Co. at its height was a multibillion-dollar Fortune 100 conglomerate. But the company’s fortunes turned in the early 1980s because of volatile oil prices and a tragic helicopter crash that killed four top executives July 29, 1982, 30 years ago this week. Less than two years after the crash, the company declared Chapter 11 bankruptcy, which was the beginning of the end of the once proud corporate giant.

Charter was Serkin’s first job after graduating from the Harvard Business School. In 12 years at Charter, he rose to the rank of executive vice president and chief financial officer. He credits the company and its chairman and founder, Raymond Mason, for allowing him to learn, grow and become the businessman he is today.

“I think the legacy is that he gave some very talented people some unbelievable opportunities and experiences that most young businesspeople never get,” Serkin said of his former boss. “I like to say I got a second [Master of Business Administration] from Charter after my first one from Harvard.”

Over a period of 30 years, Charter reached impressive heights relating to its seemingly ever-expanding and always soaring revenue stream and global breadth.

Serkin said that the company’s influence on businesses and business leaders is still palpable in the community.

Former Charter employees went on to invest in the company that eventually became EverBank Financial Corp. (NYSE: EVER). Others acquired the majority interest in Florida National Bank, which was one of the largest banks in the state before selling to the predecessor of Wells Fargo & Co. (NYSE: WFC). Other former Charter employees became entrepreneurs, CEOs and top executives of other companies, many of which are still based in Jacksonville. Former Charter employees say they learned the skills and obtained the confidence they needed to become successful during their years at Charter.

It all started with Jacksonville native Mason, who joined the family business, the Mason Lumber Co., after graduating from college in 1949. Shortly thereafter he also partnered with some former schoolmates to form businesses in the mortgage banking and land development industries. Those partnerships became the nucleus of Charter. Although the company stopped selling lumber early on, it diversified over the years to include gas stations, publishing interests, insurance business, a bank and one of its most profitable ventures, oil refineries.

Charter debuted on the Fortune 500 list in 1974 at No. 317 and peaked at No. 61 in 1984, which was the last year it was on the list and the same year it declared Chapter 11 bankruptcy. In 1984, the company had $5.57 billion in revenue, outranking food products company General Mills Inc. (NYSE: GIS) with $5.56 billion in revenue. Charter’s employee count peaked at more than 11,000 in 1981, but was down to 4,800 in 1984.

Mason, who at 85 prefers to stay out of the limelight, said he never put much thought into the influence Charter had on business in Jacksonville. Although he was the founder of the company, he considered himself one of the employees.

There were many intelligent and talented employees at Charter, Mason said, many of whom were in their 20s and 30s.

“I was as lucky a hirer as anybody had ever been,” Mason said during a phone interview from his summer home in Galway, Ireland.

Although the oil industry was one of its largest, most profitable businesses, other business units of Charter also left an indelible mark. Charter Publishing included national magazines Ladies Home Journal and Redbook. Charter owned a little more than 8 percent of the St. Joe Co. (NYSE: JOE), which was founded by Alfred du Pont and at one point owned about 22 percent of Charter. Du Pont’s brother-in-law, Jacksonville businessman Ed Ball, was a mentor and close friend of Mason’s.

Charter brought attention and, at times, even world leaders and celebrities to Jacksonville. Mason hosted Egyptian President Anwar Sadat and President Gerald Ford at his Epping Forest estate. He also hosted lavish black-tie dinner parties. Arnold Rogers, who worked for Charter Oil, said he sat next to famed artist Andy Warhol at one dinner, during which the famous pop artist fed his dog from his lap at the dinner table.

But the company was more than lavish events and a profit-making machine.

Penny Thompson, who was the company’s community relations manager and helped run its foundation, said the company provided generous donations over the years to charitable causes, including what was then Methodist Medical Center. A theater at the hospital, now Shands Jacksonville, still bears the company’s name.

Charter was also a family, said Thompson, now vice president of government affairs at Shands Jacksonville. Many former Charter employees still get together for reunions every few years.

Although the rising oil prices of the late 1970s helped fuel Charter’s growth, the volatility of oil prices in the early 1980s took its toll on the heavily leveraged company.

A series of Wall Street Journal articles about another company’s annuities problems that insinuated Charter, which also sold annuities, might be in trouble scared some investors, Rogers said. In reality, though, Charter’s insurance operations were the most profitable side of the company in 1984.

“The perception created the problem. Perception is more important than reality,” said Rogers, now president of Merrimac Capital Corp. in Jacksonville. Mason “couldn’t control the perception.”

Charter and many of its subsidiaries filed for bankruptcy on Good Friday, April 20, 1984. The reorganized Charter sold to a Cincinnati businessman and eventually became part of Spelling Entertainment, which eventually sold to CBS Productions.

“It’s Jacksonville’s loss that the Charter Co. no longer exists,” said Bruce Bower, a former Charter employee who now owns Alliance Investment Co. in Jacksonville.

Jacksonville-based Smith Hulsey & Busey, formerly known as Smith & Hulsey, which had been the company’s lead legal counsel since the 1960s, led the company through bankruptcy.

Despite Charter’s financial troubles at the end, Steve Busey, the law firm’s chairman, said the former shareholders of Charter retained a 49 percent ownership after the bankruptcy was completed in 1987.

Had it had not been for the bankruptcy, Mason said he believes the company would still be in business today, although he probably still would have retired decades ago. Still, he doesn’t like to dwell on what could have been.